In an interview to be broadcast on The World at One on BBC Radio 4, Schmidt said, "Of course that omits the fact that we also hire more than 2,000 employees and are investing heavily in Britain.

"Britain has been a very good market for us. We empower literally billions of pounds of start-ups through our advertising network and so forth. And we're a key part of the electronic commerce expansion of Britain which is driving a lot of economic growth for the country.

"I think the most important thing to say about our taxes is that we fully comply with the law and obviously, should the law change, we'll comply with that as well."

The PAC heard that Google manages its tax affairs in the UK through an Irish subsidiary, which employs Google UK as an agent. Only the fees paid back to the UK arm are taxable and the Irish arm of pays much of its revenue to the web giant’s Bermudan firm in a legal process.